MILAN — Benetton Group SpA forecast around a 2 to 3 percent decline in 2009 revenues and “satisfactory profitability” after third-quarter earnings gained 47 percent, buoyed by the recovery of temporarily deferred sales, growth in emerging markets and improved efficiencies.
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The Italian clothing retailer also said it expected to reduce net indebtedness by yearend by comparison with full-year 2008.
For the three months through Sept. 30, net profits increased to 56 million euros, or $80 million, from 38 million euros, or $57.3 million. Revenues grew 13.2 percent to 609 million euros, or $870.4 million, from 538 million euros, or $810.6 million.
Nine-month net profits declined to 82 million euros, or $112.1 million, from 110 million euros, or $167.5 million. Revenues slipped 2.8 percent to 1.49 billion euros, or $2.04 billion, from 1.53 billion euros, or $2.34 billion.
Dollar figures were converted at average exchange rates for the periods to which they refer.
“On the basis of the good results in the nine months and in the absence of positive signals on the macroeconomic front, we expect to confirm revenues for the full year substantially in line with the nine-months trend,” Benetton chief executive officer Gerolamo Caccia Dominioni said. “Due to higher-than-expected savings, we will ensure satisfactory profitability. Positive cash generation will result, by the end of the year, in lower indebtedness than at December 2008.”
At Sept. 30, net debts reached 819 million euros, or $1.23 billion.
Benetton said in August it moved the delivery time of the fall 2009 collection to the third quarter to better match seasonality, provide better service to clients and improve management of transport and logistics. The temporarily deferred sales from these were recovered in the three months through Sept. 30 and helped maintain revenue performance for the period despite the strong euro, the company said Thursday.
Nine-month sales were “satisfactory” in Italy, France, Greece and the Nordic countries, but slowed in the Iberian Peninsula and the rest of continental Europe. Sales contracted in Turkey, which Benetton attributed to weak consumer spending and exchange rates, and in Russia, where Benetton underlined it remained committed to seizing development opportunities. Sales grew 13 percent in emerging markets, with a “particularly positive performance” in India and China.